Labour is to “guarantee” that each of its policies will be fully funded and require no “additional borrowing”, as it launches its manifesto on Monday.
Leader Ed Miliband will rule out a “shopping list of spending policies” and promise a Labour government would cut the deficit every year.
The Conservatives would go on a “reckless spending spree”, he will say.
Tory Treasury Minister David Gauke said Mr Miliband had “no plan to clear the deficit” and would have to borrow more.
“Even Ed Miliband’s own campaign chief admits Labour will borrow more to pay for their unfunded spending promises,” he argued.
‘Party of responsibility’
The first page of Labour’s manifesto, Mr Miliband will say, “sets out a vow to protect our nation’s finances; a clear commitment that every policy… is paid for without a single penny of extra borrowing”.
Mr Miliband will add: “In recent days you have seen the Conservatives throwing spending promises around with no idea of where the money is coming from, promises which are unfunded, unfair and unbelievable.”
In other election news:
- The Liberal Democrats are launching a “five point plan”, aimed at consumers and commuters, with proposals such as to end above-inflation rail fare rises and force energy firms to allow customers to change supplier within 24 hours
- One hundred small business owners who used to support Labour have written a letter to the Sun saying they are intend to vote Tory
- Labour has opened up a three-point lead over the Conservatives, according to the latest YouGov poll which puts Ed Miliband’s party on 36%
With political parties are under increasing pressure to explain how they will fund their pledges, the Institute for Fiscal Studies complained on Sunday that they were making “lots of promises” without producing much detail on how to deliver them.
But Labour is hoping to position itself as “the party of responsibility” for the public finances. It is aiming for a budget surplus “as soon as possible in the next parliament”.
Policy guide: Economy
This issue includes the wider economy and deficit reduction but also employment and the role of business.
Its manifesto – being unveiled in Manchester – commits a Labour government to what it calls a “budget responsibility lock”.
This would “guarantee” that every policy is paid for without additional borrowing and would, in future, require all the major parties to have their tax and spending plans audited by the independent Office for Budget Responsibility before a general election.
The manifesto sets out Labour’s pre-announced policy pledges, including:
- A £2.5bn fund for the NHS paid for largely by a mansion tax on properties valued at over £2m
- Twenty-five hours of childcare for working parents of three and four-year olds, paid for by increasing the banking levy by £800m
- Freezing gas and electricity bills until 2017, so they can only fall not rise
- Banning zero-hour contracts and raising the minimum wage to £8
- Scrapping winter fuel payments for the richest pensioners, capping child benefit rises and cutting ministers’ pay by five per cent
- A 50p tax rate on incomes over £150,000 a year and abolishing non-dom status
Both the Conservatives and Liberal Democrats have pledged to eliminate the fiscal deficit by 2017/18. However, while Labour promises to reduce the deficit during every year of the coming parliament, the party offers no deadline, saying it would commit to achieving a budget surplus “as soon as possible “in the next Parliament.
And Treasury Minister Mr Gauke pointed to polls suggesting Labour could have to rely on a deal with the Scottish National Party – which is campaigning to end austerity – in order to form a government.
He said: “Everybody knows the SNP will call the tune and force even more borrowing, even more debt and even more taxes on a weak Ed Miliband government. Britain’s hard-working taxpayers will pay the price for the economic chaos.”
Analysis, by Iain Watson, BBC political correspondent
It looks like a political role reversal. While the Conservatives are promising more cash for the NHS – without detailed costings – Labour is putting fiscal responsibility on the very first page of its manifesto.
Labour says it is like no other election document it has ever produced. Out goes a list of spending commitments and aspirations, in comes what it calls a “budget responsibility” lock.
So Prudence – last seen when Gordon Brown was in number 11 Downing Street but banished when he moved to No 10 and as the economy crashed – is apparently making a comeback.
Labour strategists say that before they can accentuate the positive, they first have to eliminate a negative and prove the party can be trusted to control public spending again.
But they are likely to face increased questioning over what cuts they are contemplating to government departments as a consequence.
They also recognise they need to mobilise their core supporters in a tight contest. So Ed Miliband will argue that while there won’t be big spending under a Labour government, there will be “big reforms” to benefit working people – including stronger employment rights.
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